Atlantic Manufacturing Company uses standard costing methodology in their journal entries and accounts. Standards for direct labor are as follows:
$$\begin{array} { l l l l }
\text { Hours per unit } & 0.5 & \text { Price per hour } & \$ 18.00
\end{array}$$
Actual direct labor for the month: 1,200 hours for a total cost of $24,000
Planned production for the month: 3,000 units
The journal entry to record the payment of direct labor wages would be to:

Question

Atlantic Manufacturing Company uses standard costing methodology in their journal entries and accounts. Standards for direct labor are as follows:
$$\begin{array} { l l l l } 
\text { Hours per unit } & 0.5 & \text { Price per hour } & \$ 18.00
\end{array}$$
Actual direct labor for the month: 1,200 hours for a total cost of $24,000
Planned production for the month: 3,000 units
The journal entry to record the payment of direct labor wages would be to:

Quizplus · Accepted Answer

The standard cost for labor is 1,500 hours (3,000 units x 0.5 hours) at $18/hour, totaling $27,000. The actual cost was $24,000 for 1,200 hours. The labor price variance is $2,400 favorable ($27,000 - $24,000). The journal entry reflects the standard cost, actual payment, and variance.

Atlantic Manufacturing Company Uses Standard Costing Methodology in Their Journal Hours per unit 0.5 Price per hour $18.00\begin{array} { l l l l } \text { Hours per unit } & 0.5 & \text { Price per hour } & \$ 18.00\end{array} Hours per unit ​0.5​ Price per hour ​$18.00​

Atlantic Manufacturing Company Uses Standard Costing Methodology in Their Journal $\begin{array} { l l l l } \text { Hours per unit } & 0.5 & \text { Price per hour } & \$ 18.00\end{array}$